A trustworthy decision —

Microsoft’s hefty antitrust fine upheld by European court

Fine lowered by 4.5 percent, but Microsoft still has to pay.

The European Union's General Court today rejected Microsoft's appeal of a 2008 antitrust ruling in which the software giant was fined €899 million ($1.12 billion) for failing to comply with a previous antitrust decision.

The case goes all the way back to 1993 when Novell complained about Microsoft licensing practices. The circumstances relevant to today's ruling occurred between 1998 and 2004: during that time, Microsoft was found to have refused to give its competitors interoperability information, preventing competitors' products from being able to work with Microsoft's Windows server software. In 2004, the European Commission "required Microsoft to grant access to that information and to allow the use of it on reasonable and non-discriminatory terms," the EU's General Court noted today.

But Europe and Microsoft disagreed over how to define fair rates, and Microsoft "failed to provide a complete and accurate version of the interoperability information," leading to several fines, the biggest one being a 2008 penalty of €899 million. Microsoft appealed the 2008 ruling, saying the Commission's ruling wasn't clear enough and that the Commission erred in "requiring Microsoft to establish that its trade secrets were innovative" in order to justify the charging of royalties for its trade secrets.

Today's ruling (full text) upheld the fine and rejected all of the arguments put forward by Microsoft. "Microsoft has failed to invalidate the Commission’s assessment that 166 of the 173 technologies relating to the interoperability information were not innovative," the court said.

Microsoft got one piece of good news from today's ruling. The Court lowered the fine 4.5 percent to €860 million ($1.07 billion) because of a letter the Commission sent to Microsoft on June 1, 2005. In that letter "the Commission accepted that Microsoft could restrict distribution of products developed by its ‘open source’ competitors on the basis of non-patented and non-inventive interoperability information until delivery of the Court’s judgment," or until Sept. 17, 2007. But the letter was relevant only to a marginal part of the case and did not affect the ruling as a whole.

Microsoft has a long history of tangling with antitrust regulators in the US as well regarding the methods it used to maintain monopolies in the operating system and Web browser markets. Today's ruling is a reminder that Microsoft is still paying a price for its actions in its bad old days. Microsoft has not said whether it will appeal the decision to Europe's highest court, but in a statement quoted by Reuters said "Although the General Court slightly reduced the fine, we are disappointed with the court's ruling."

Promoted Comments

What is truly ironic about cases like this, regardless of merit, is that by the time verdicts and rulings are handed down, the technology in question is in most cases obsolete.

So very true, especially in this case. Microsoft is dominant player no longer, but one of many:Google, Apple, Amazon.

The article states that this fine was related to Windows Server, not Windows desktop software. If that's the case then Google, Apple, and Amazon aren't the best examples of competitors. When people think server operating systems they think "Windows" or "Unix/Linux". There are plenty of companies selling those operating systems or building cloud solutions based on them, and in the case of *nix companies sometimes heavily customize them, but those two categories dominate the server market.

Microsoft is still a major player in the server market. Wikipedia lists them as having a 48.5% market share in terms of units sold in 2011, and a 36.10% share in terms of systems publicly accessible on the Internet (http://en.wikipedia.org/wiki/Usage_shar ... ms#Servers). That's huge no matter how you cut it. If you roll everything *nix into one category then Microsoft is still in the minority, but that's not an accurate thing to do. It's better to compare them against specific operating systems that other companies might be selling (or giving away freely but charging for support), such as Red Hat, Ubuntu etc. When you do that Microsoft probably comes out far ahead of any single competitor.

So yes, I consider them a dominant player in the server market. They're not as dominant there as they are with desktops, but they still have a massive market share in terms of operating systems sold.

Microsoft's actions over the last few months are an indicator it has not learned anything from this and its previous oversight by the US Justice Department for over 10 years. Blocking other browsers on the new tablets and "secure boot" are rehashes of the same thing they were brought to court for back then.

Microsoft's actions over the last few months are an indicator it has not learned anything from this and its previous oversight by the US Justice Department for over 10 years. Blocking other browsers on the new tablets and "secure boot" are rehashes of the same thing they were brought to court for back then.

Irrelevant. Secureboot doesn't prevent other operating systems from ever being used, and can be enabled for other operating systems.As far as banning other browsers, that only applies to Windows RT on tablets, and currently it has 0% marketshare.You can't be in an antitrust position in a market where you hold no marketshare, so there are zero issues if you look at the law in a sane manner. If it was Windows 8 x86 which was restricting other browsers, there might be an issue.

Hilarious. The amount of interest Microsoft would have made on just profits alone between 2008 and 2012 makes this a meaningless token of a fine.

Before the inevitable banker pops in and says "oh 800m is a lot of money", sure it is - to you and me, and most of the world's companies. But to Microsoft, the company that makes $20bn a year of profit after expenses, it's barely a tap on the wrist let alone a deterrent. They're been writing off $2bn a year in losses from their Online services as it is!!

Microsoft's actions over the last few months are an indicator it has not learned anything from this and its previous oversight by the US Justice Department for over 10 years. Blocking other browsers on the new tablets and "secure boot" are rehashes of the same thing they were brought to court for back then.

??

And its OK for Apple to do similar things? On iOS devices can you choose your default browser? or Mapping app, or email application? Does OSx give you a choice of browsers when you first install or does it just install Safari?

Microsoft's actions over the last few months are an indicator it has not learned anything from this and its previous oversight by the US Justice Department for over 10 years. Blocking other browsers on the new tablets and "secure boot" are rehashes of the same thing they were brought to court for back then.

??

And its OK for Apple to do similar things? On iOS devices can you choose your default browser? or Mapping app, or email application? Does OSx give you a choice of browsers when you first install or does it just install Safari?

We're talking about two different entities here, which fall under two different grades of problem. Microsoft violated antitrust laws by creating no option for OEMs and users with deceptive practices and outright monopolistic control and manipulating contracts to ensure OEMs got punished when they didn't obey.

Apple might be full of assholes but the difference here is there is no third party to squeeze out.

Put simply, it's not illegal to be an asshole, but it is illegal to violate antitrust laws.

Microsoft's actions over the last few months are an indicator it has not learned anything from this and its previous oversight by the US Justice Department for over 10 years. Blocking other browsers on the new tablets and "secure boot" are rehashes of the same thing they were brought to court for back then.

??

And its OK for Apple to do similar things? On iOS devices can you choose your default browser? or Mapping app, or email application? Does OSx give you a choice of browsers when you first install or does it just install Safari?

We're talking about two different entities here, which fall under two different grades of problem. Microsoft violated antitrust laws by creating no option for OEMs and users with deceptive practices and outright monopolistic control and manipulating contracts to ensure OEMs got punished when they didn't obey.

Apple might be full of assholes but the difference here is there is no third party to squeeze out.

Put simply, it's not illegal to be an asshole, but it is illegal to violate antitrust laws.

Oh come on. Its not different. Apple is the cool kid getting away with everything and Microsoft is the big giant that everyone points fingers at.

We're talking about two different entities here, which fall under two different grades of problem. Microsoft violated antitrust laws by creating no option for OEMs and users with deceptive practices and outright monopolistic control and manipulating contracts to ensure OEMs got punished when they didn't obey.

In that case, the logical thing for Microsoft to do would be to cut out OEM's altogether and directly manufacture hardware, like Apple does. Indeed, they're already moving in that direction. But would that really be a better situation for the consumer? I doubt that.

We're talking about two different entities here, which fall under two different grades of problem. Microsoft violated antitrust laws by creating no option for OEMs and users with deceptive practices and outright monopolistic control and manipulating contracts to ensure OEMs got punished when they didn't obey.

In that case, the logical thing for Microsoft to do would be to cut out OEM's altogether and directly manufacture hardware, like Apple does. Indeed, they're already moving in that direction. But would that really be a better situation for the consumer? I doubt that.

It's what Europe deserves. They forced it in that direction. You allow a company with a model like apples to thrive while repeatedly pounding a company like microsoft who allows third parties. Im not saying that i want europe to be punished... im saying that their strategy here sucked.

Oh come on. Its not different. Apple is the cool kid getting away with everything and Microsoft is the big giant that everyone points fingers at.

Please. Did you not read the article? This fine has a long, long history and came down well before Apple was even remotely considered a powerful company.

Apple can still trip up and get fucked up in the courts, but this is a result of a ruling from years ago. And yes, if you think Apple should be investigated then start filing complaints.

DarthSidious wrote:

So very true, especially in this case. Microsoft is dominant player no longer, but one of many: Google, Apple, Amazon.

Not in this case. Back in 1998-2004 Microsoft was the 800lb gorilla with no peer.

pusher robot wrote:

In that case, the logical thing for Microsoft to do would be to cut out OEM's altogether and directly manufacture hardware, like Apple does. Indeed, they're already moving in that direction. But would that really be a better situation for the consumer? I doubt that.

Probably not, considering MS still has a monopoly on the desktop space. They might be able to dodge more trouble if they spun off the Server and all Win32-based technologies and went exclusively Metro.

FrostX wrote:

It's what Europe deserves. They forced it in that direction. You allow a company with a model like apples to thrive while repeatedly pounding a company like microsoft who allows third parties. Im not saying that i want europe to be punished... im saying that their strategy here sucked.

Apple's model didn't exist when this ruling came down. Who knows, Apple may be on the chopping block but they're keeping it under wraps.

Oh come on. Its not different. Apple is the cool kid getting away with everything and Microsoft is the big giant that everyone points fingers at.

Please. Did you not read the article? This fine has a long, long history and came down well before Apple was even remotely considered a powerful company.

Apple can still trip up and get fucked up in the courts, but this is a result of a ruling from years ago. And yes, if you think Apple should be investigated then start filing complaints.

DarthSidious wrote:

So very true, especially in this case. Microsoft is dominant player no longer, but one of many: Google, Apple, Amazon.

Not in this case. Back in 1998-2004 Microsoft was the 800lb gorilla with no peer.

pusher robot wrote:

In that case, the logical thing for Microsoft to do would be to cut out OEM's altogether and directly manufacture hardware, like Apple does. Indeed, they're already moving in that direction. But would that really be a better situation for the consumer? I doubt that.

Probably not, considering MS still has a monopoly on the desktop space. They might be able to dodge more trouble if they spun off the Server and all Win32-based technologies and went exclusively Metro.

FrostX wrote:

It's what Europe deserves. They forced it in that direction. You allow a company with a model like apples to thrive while repeatedly pounding a company like microsoft who allows third parties. Im not saying that i want europe to be punished... im saying that their strategy here sucked.

Apple's model didn't exist when this ruling came down. Who knows, Apple may be on the chopping block but they're keeping it under wraps.

I'm aware of the history. Apple's closed ecosystem is its biggest asset. Financially its a huge benefit to them, and publicly many of my friends talk about how they like the ecosystem because they know its all apple and it all works together. Microsoft is not allowed to do that by the rules that were applied to them. Including the whole browser ballet thing that happened only a few years ago.

Microsoft's actions over the last few months are an indicator it has not learned anything from this and its previous oversight by the US Justice Department for over 10 years. Blocking other browsers on the new tablets and "secure boot" are rehashes of the same thing they were brought to court for back then.

??

And its OK for Apple to do similar things? On iOS devices can you choose your default browser? or Mapping app, or email application? Does OSx give you a choice of browsers when you first install or does it just install Safari?

We're talking about two different entities here, which fall under two different grades of problem. Microsoft violated antitrust laws by creating no option for OEMs and users with deceptive practices and outright monopolistic control and manipulating contracts to ensure OEMs got punished when they didn't obey.

Apple might be full of assholes but the difference here is there is no third party to squeeze out.

Put simply, it's not illegal to be an asshole, but it is illegal to violate antitrust laws.

Mesago, I think you missed the context of danstl's reply. The part about the iOS browser was countering an irrelevant comment about WinRT's browser by drhowarddrfine -- it had nothing to do with the EU case.

Uhhh Apple and their closed hardware/OS ecosystem has been around since the '80s. And I think the issue others were complaining about is how one company can incorporate a standard browser, media player, etc as standard OS equipment but another cannot based on the categorization as the latter as a virtual monopoly and the former not.

Uhhh Apple and their closed hardware/OS ecosystem has been around since the '80s. And I think the issue others were complaining about is how one company can incorporate a standard browser, media player, etc as standard OS equipment but another cannot based on the categorization as the latter as a virtual monopoly and the former not.

Uhhh Apple and their closed hardware/OS ecosystem has been around since the '80s.

And Apple, until recently, has never commanded enough of a position to matter.

Quote:

And I think the issue others were complaining about is how one company can incorporate a standard browser, media player, etc as standard OS equipment but another cannot based on the categorization as the latter as a virtual monopoly and the former not.

Because being categorized as a monopoly means the rules have changed for you, and things that were legal previously are no longer?

Apple is actually in a few court cases about the anti-competitive and potentially monopolistic abuse of their iTunes store. What Apple is today is what Microsoft was back in these days. The difference is that Apple's managed to make sure things are shinier and that they are still thought of as the underdog. They are a giant behemoth that creates profit off of consumers who do not understand there are alternatives that don't lock them into a prison of bitten fruit.

Microsoft has no effective monopoly anymore, but since this case is back in the dark ages time of Microsoft than that fine is going to stand. Win8 completely still allows third party OSes to be installed, you don't even need to use SecureBoot, but you can use it with other OSes that support this function... which is... all of them. Linux supports it (just check your distro), Windows 7, even supports it, and so does MacOSX (if it were allowed by Apple to be installed on non-Mac Hardware).

The backlash of TechNews when they heard about SecureBoot did two things poorly. They not only jumped to conclusions before researching this particular feature, but they also did a poor job of fixing their comments later.

Uhhh Apple and their closed hardware/OS ecosystem has been around since the '80s.

And Apple, until recently, has never commanded enough of a position to matter.

Nice dodge. Your contention was not that Apple did not matter, but that, "Apple's model didn't exist when this ruling came down." No which one is it? That is the problem with revisionist history and selectively looking at data to fit a conclusion. Or maybe it is that I am old enough to have used Apple computers in the 80s and watched the United States vs. Microsoft anti-trust in real time instead of reading the post-hock bullet points? The only thing worse than that is out dated regulations being applied to emerging markets.

Microsoft's actions over the last few months are an indicator it has not learned anything from this and its previous oversight by the US Justice Department for over 10 years. Blocking other browsers on the new tablets and "secure boot" are rehashes of the same thing they were brought to court for back then.

Oh come on. Its not different. Apple is the cool kid getting away with everything and Microsoft is the big giant that everyone points fingers at.

I don't even know why I even bother replying. Some people obviously have serious comprehension issues with company A who has a monopoly in market X that has to obey a different set of rules versus company B who doesn't effing have a monopoly in same market X who is bound by other rules.

It's mind boggling how people don't understand this little but very important detail. MS has a monopoly in desktop OS software. Linux, Apple, BeOS, OS/2, etc., don't thus they are not bound by the same rules as MS is bound to.

Microsoft's actions over the last few months are an indicator it has not learned anything from this and its previous oversight by the US Justice Department for over 10 years. Blocking other browsers on the new tablets and "secure boot" are rehashes of the same thing they were brought to court for back then.

Irrelevant. Secureboot doesn't prevent other operating systems from ever being used, and can be enabled for other operating systems.As far as banning other browsers, that only applies to Windows RT on tablets, and currently it has 0% marketshare.You can't be in an antitrust position in a market where you hold no marketshare, so there are zero issues if you look at the law in a sane manner. If it was Windows 8 x86 which was restricting other browsers, there might be an issue.

And how exactly are they even restricting browsers? Browsers ARE the exception to the WinRT Metro sandbox restrictions. (at least for the x86 variant where it matters from an antitrust standpoint)

Your comment about no market-share is also dead on. MS can do pretty much anything they want with the Windows RT variant.. They are not restricted the way they are with the x86 variant of Windows.

As for SecureBoot, it has been stated many times that this is a non issue. Linux/Unix Distros will pay the small fee to get a boot key, and life goes on.. (and for anyone wanting to use secureboot for their own custom OS/Distro, the specification allows you to manufacturer your own keys and blow away the previous ones. You just won't be able to boot into Windows 8 anymore in secure mode)

Oh come on. Its not different. Apple is the cool kid getting away with everything and Microsoft is the big giant that everyone points fingers at.

I don't even know why I even bother replying. Some people obviously have serious comprehension issues with company A who has a monopoly in market X that has to obey a different set of rules versus company B who doesn't effing have a monopoly in same market X who is bound by other rules.

It's mind boggling how people don't understand this little but very important detail. MS has a monopoly in desktop OS software. Linux, Apple, BeOS, OS/2, etc., don't thus they are not bound by the same rules as MS is bound to.

Kapiche?

This was true. Microsoft was recently let off the hook in the US, and UK (IIRC) for this as no longer having an 'Effective Monopoly'. That is to say, people believe and actively pursue alternatives to Microsoft Windows as their Operating System of choice. But I understand, the comment is about the time period when they were an effective monopoly able and actively abusing their stance.

Apple does have to be careful as there are about 5, maybe a few more, against them now with abuse of monopoly with regards to iTunes. So, with regards to that service, at least, they are potentially going to be have to do similar to Microsoft. But yes. Being a jerkface with no monopoly is completely different than trying to offer even free antivirus to your consumers so long as you have a monopoly. Tricky business, these laws.

Microsoft's actions over the last few months are an indicator it has not learned anything from this and its previous oversight by the US Justice Department for over 10 years. Blocking other browsers on the new tablets and "secure boot" are rehashes of the same thing they were brought to court for back then.

??

And its OK for Apple to do similar things? On iOS devices can you choose your default browser? or Mapping app, or email application? Does OSx give you a choice of browsers when you first install or does it just install Safari?

We're talking about two different entities here, which fall under two different grades of problem. Microsoft violated antitrust laws by creating no option for OEMs and users with deceptive practices and outright monopolistic control and manipulating contracts to ensure OEMs got punished when they didn't obey.

Apple might be full of assholes but the difference here is there is no third party to squeeze out.

Put simply, it's not illegal to be an asshole, but it is illegal to violate antitrust laws.

Just to add a bit... Safari also was never a integral part of the shell that can't be uninstalled properly, like IE was for a long time. And then, you always had isync to sync your things with non-apple devices, etc etc etc

Oh come on. Its not different. Apple is the cool kid getting away with everything and Microsoft is the big giant that everyone points fingers at.

I don't even know why I even bother replying. Some people obviously have serious comprehension issues with company A who has a monopoly in market X that has to obey a different set of rules versus company B who doesn't effing have a monopoly in same market X who is bound by other rules.

It's mind boggling how people don't understand this little but very important detail. MS has a monopoly in desktop OS software. Linux, Apple, BeOS, OS/2, etc., don't thus they are not bound by the same rules as MS is bound to.

Kapiche?

This was true. Microsoft was recently let off the hook in the US, and UK (IIRC) for this as no longer having an 'Effective Monopoly'. That is to say, people believe and actively pursue alternatives to Microsoft Windows as their Operating System of choice. But I understand, the comment is about the time period when they were an effective monopoly able and actively abusing their stance.

Apple does have to be careful as there are about 5, maybe a few more, against them now with abuse of monopoly with regards to iTunes. So, with regards to that service, at least, they are potentially going to be have to do similar to Microsoft. But yes. Being a jerkface with no monopoly is completely different than trying to offer even free antivirus to your consumers so long as you have a monopoly. Tricky business, these laws.

First of all.. Being a jerkface?

Second of all.. Microsoft has never actually held an 'effective', 'true' , or any other kind of non hasbro monopoly you can think of.

Third of all.. You don't need to have a monopoly to have antitrust allegations brought against you. (You only require an act designed to suppress competition, usually using your larger market position to do so)

Now I'm not here trying to argue about past MS antitrust cases, as they were clearly in the wrong during the mid to late 90's, but you are making it out as though you must completely dominate the market to have antitrust allegations brought against you when that is just not the case.

i.e iTunes is surely not the only thing Apple would potentially have to worry about, as they control a large percentage of others markets too. (not to say they have done anything wrong, but the potential for an antitrust case is there if they do)

Furthermore your antivirus statement is most likely not even correct. IIRC it automatically disables itself if another antivirus client is installed, and I think it can be removed completely if needed in Windows 8 to get around the issue of integrating into the OS.

What is truly ironic about cases like this, regardless of merit, is that by the time verdicts and rulings are handed down, the technology in question is in most cases obsolete.

So very true, especially in this case. Microsoft is dominant player no longer, but one of many:Google, Apple, Amazon.

The article states that this fine was related to Windows Server, not Windows desktop software. If that's the case then Google, Apple, and Amazon aren't the best examples of competitors. When people think server operating systems they think "Windows" or "Unix/Linux". There are plenty of companies selling those operating systems or building cloud solutions based on them, and in the case of *nix companies sometimes heavily customize them, but those two categories dominate the server market.

Microsoft is still a major player in the server market. Wikipedia lists them as having a 48.5% market share in terms of units sold in 2011, and a 36.10% share in terms of systems publicly accessible on the Internet (http://en.wikipedia.org/wiki/Usage_shar ... ms#Servers). That's huge no matter how you cut it. If you roll everything *nix into one category then Microsoft is still in the minority, but that's not an accurate thing to do. It's better to compare them against specific operating systems that other companies might be selling (or giving away freely but charging for support), such as Red Hat, Ubuntu etc. When you do that Microsoft probably comes out far ahead of any single competitor.

So yes, I consider them a dominant player in the server market. They're not as dominant there as they are with desktops, but they still have a massive market share in terms of operating systems sold.

Fines from EU antitrust cases go directly to EU's budget. Equal sum is then deducted from the budget payments of member states. In theory all european tax payers get the benefit. In practise Club Med and Eastern Europe are net receivers from EU's budget, so its the central- and north european tax payers (who pay the bils of European Union) who get the benefit.

I'm aware of the history. Apple's closed ecosystem is its biggest asset. Financially its a huge benefit to them, and publicly many of my friends talk about how they like the ecosystem because they know its all apple and it all works together. Microsoft is not allowed to do that by the rules that were applied to them. Including the whole browser ballet thing that happened only a few years ago.

You should be careful. If you conflate too rapidly, you'll get dizzy. Keep in mind that if Microsoft hadn't had such dominant marketshare, they would have been allowed to continue their egregious behavior ad infinitum. The reason all the antitrust stuff happened to them was that they'd achieved a position where they had such completely dominant marketshare in desktop OSs (and at the time, there really wasn't any other kind, to speak of, in the consumer space). Apple had, what, a 3% marketshare back then? Less? The market was basically flavor1 of Windows vs flavor2 of Windows. Apple doesn't currently have 95% of mobile, or 95% of desktop. They've got 100% of the iOS market, sure, but 0% of the Android, RIM, and Windows Phone 7 markets.

Hilarious. The amount of interest Microsoft would have made on just profits alone between 2008 and 2012 makes this a meaningless token of a fine.

Before the inevitable banker pops in and says "oh 800m is a lot of money", sure it is - to you and me, and most of the world's companies. But to Microsoft, the company that makes $20bn a year of profit after expenses, it's barely a tap on the wrist let alone a deterrent. They're been writing off $2bn a year in losses from their Online services as it is!!

Sad, but true. What's even worse, this sum is calculated from 2004-08 revenue, but only from the mentioned business units (guess windows server or something). It should also include interest fees, although I'm not sure if the 800m do. But it doesn't matter, the EC will calculate standard banking interest, not Microsoft interest rates....

Oh come on. Its not different. Apple is the cool kid getting away with everything and Microsoft is the big giant that everyone points fingers at.

I don't even know why I even bother replying. Some people obviously have serious comprehension issues with company A who has a monopoly in market X that has to obey a different set of rules versus company B who doesn't effing have a monopoly in same market X who is bound by other rules.

It's mind boggling how people don't understand this little but very important detail. MS has a monopoly in desktop OS software. Linux, Apple, BeOS, OS/2, etc., don't thus they are not bound by the same rules as MS is bound to.

Kapiche?

If I remember correctly, you don't need dominant position to be slapped with antitrust. It usually gets applied to companies WITH dominant position because it would be suicidal for smaller companies to try to pull the same thing.